eBusiness Weekly
Africa Moyo
Businesspeople are calling for legislation that outlaws the Reserve Bank of Zimbabwe (RBZ) from raiding their accounts for foreign currency, which happened in the last years of hyperinflation. Some industrialists, who are concerned by the behaviour of the RBZ in the past, are considering raising the issue during budget consultations so that the move to prevent the central bank from raiding companies’ FCAs becomes a law under the Finance Act.
In the worst case, others are calling for a Presidential decree so that the central bank is kept at bay. This comes as the RBZ, through a monetary policy statement issued in October 2007 centralising all FCAs, raided several companies’ accounts allegedly to offset International Monetary Fund arrears.
“I think there should be a Presidential decree that the RBZ should never touch people’s money. What happened in the past was painful,” said one businessperson.
Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe, told Business Weekly yesterday that while the raiding of accounts is an issue of major concern, they may just want guarantees that will not happen in future.
“I am aware that businesspeople have concerns over what happened in the past. But calling for a law to prevent the recurrence of that may be too much given that many things didn’t go well back then. We therefore need the RBZ to go back to playing its usual roles, and to give assurances to businesspeople that the raiding of foreign currency accounts will not happen again. Indeed people are psychologically scarred but if we can get consistency from the RBZ, then it will be fine,” said Jabangwe.
Government has indicated that the raiding of companies’ FCAs would not be repeated under the new administration, as part of efforts to instill confidence in the market and investors. Deputy Minister of Finance and Economic Planning Terrence Mukupe, says the mistakes of the past would not be repeated, as Government seeks to turn a new page.
“We can never have the same situation. I know there was the issue of the Meikles money that was taken from their account by the central bank. We also had people whose money was taken by the central bank in FCA accounts. I think in terms of confidence building, we have to make sure that it is actually illegal to do this,” said Deputy Minister Mukupe.
According to WikiLeaks cables, then RBZ Governor Dr Gideon Gono, is alleged to have paid $125 million to IMF using funds taken from exporting companies. Zimbabwe Stock Exchange – listed Meikles Limited lost $38 million to the RBZ while Trojan Mine’s US$1 million was grabbed from its account held by BancABC. Another firm, China Shougang International had its Standard Charted Bank account raided of $45 000 by the central bank in 2007.
Safeguard’s account was also plundered of $38 000 while an unidentified safari firm lost $150 000 to the RBZ. In 2013, the Supreme Court ordered the central bank to repay — at 12 percent interest — all firms whose FCAs had been raided. Government has since repaid some of the firms after issuing $300 million worth of Treasury Bills to local banks.
Under Dr Gono, the RBZ engaged in quasi-fiscal activities and raked a debt of $1,4 billion. Government has since assumed the debt following the gazetting of the Reserve Bank of Zimbabwe Debt Assumption Act on July 27, 2015. The law, which took effect on August 7, 2015, is designed to “provide for the settlement of certain liabilities” incurred by the RBZ.
The liabilities in question were incurred by the central bank before December 31, 2008 in the course of quasi-fiscal operations undertaken with Government approval.
